The Council of the European Union (EU) has announced a “breakthrough” agreement on long-awaited plans for a single EU Patent and a new European patent court.

Together, these initiatives will make it less costly for businesses to protect innovative technology and make litigation more accessible and predictable, says the Commission.

Among the benefits for companies from the creation of a specialised, unified patent court will be that they no longer have to litigate in parallel in different countries and thus incur high costs, which currently average at least 500,000 euros in a typical case. A unified court can save as much as 289 million euros each year for European companies, says the Commission.

The creation of an EU Patent – originally proposed back in 2000 - would also help to improve the current situation where a patent designating only 13 EU member states is already 11 times more expensive than a US patent, it adds, but cautions that progress here will depend on a solution to be found for arrangements covering translation, which will be subject of a separate Regulation.

However, the Council has also reached a common understanding on renewal fees - which will be set at a level aimed at boosting European innovation and fostering competitiveness - and cooperation between patent offices in Europe. The EU Patent will involve partnerships between the offices to create synergies, which will bring about more rapid delivery of patents and increase speed of access to market for innovative products and services, it notes.

Welcoming the agreement - which was reached on December 4 and announced yesterday – Commission vice president and Commissioner for Enterprise and Industry Gunter Verheugen said that making patenting less costly and more efficient is a precondition for fostering innovation and competitiveness, which is why the agreement “cannot be overestimated. It comes at a moment when it is most needed,” he said.

Before the agreement last week, leaders of the Commission’s Directorate General (DG) on Competition were continuing to express frustration with Europe’s current fragmented patent system and calling for an end to delays in its reform.

In an “exchange of views” with the European Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI) Philip Lowe, director-general of DG Competition, criticized the filing of multiple patents for the same product and the initiation of time-consuming legal challenges as two of the “tools” used by branded drugmakers to keep generic competition off the market. He acknowledged that these tools may be used to achieve legitimate goals, but pointed out that some blockbuster drugs are protected by as many as 1,300 patents or pending patent applications across the member states.

Under the current fragmented patent system, litigation cases last for 2.8 years on average, produce inconsistent results across the EU in around 11% of cases and are “relatively expensive to everyone, although very profitable to the legal professions," Mr Lowe told the legislators.

Also last week, the outgoing and controversial Competition Commissioner Neelie Kroes described the current fragmented patient system as a “clear waste of everyone’s time.”

Speaking at the Competition 09 Summit in Brussels, Ms Kroes also described the Commission pharmaceutical inquiry as “overdue and essential” and warned: “we will keep pushing on the case front. And we may want to consider revisiting the issue of parallel trade in the pharmaceutical sector.” Mr Lowe also told the ENVI committee that Commission officials will continue to monitor settlement agreements within the sector, and will act on those which have the effect of curbing market entry for generics.

- Next steps for patent reform will include an opportunity for Parliament to debate the proposals, while the Council is also awaiting an Opinion from the European Court of Justice, which it sought in June, on their compatibility with EU Treaties.